March 2, 2015

The American Cable Association holds its summit and congressional committees hold cybersecurity hearings as well as budget hearings on NASA, the Federal Communications Commission and the Commerce Department this week.

The Association of American Universities, the Association of Public and Land Grant Universities, the Biotechnology Industry Organization, the Innovation Alliance, the Medical Device Manufacturers Association, and the National Venture Capital Associationhost a patent event.

February 27, 2015

The Federal Communications Commission took historic action this week to claim broader regulatory authority over broadband service providers, reclassifying broadband service under a 1934 law that governs common carriers. Your Weekly Wrapup includes posts on the FCC’s net neutrality rules, city-owned broadband and a tax bill in Oregon that state lawmakers hope will attract Google Fiber and others.

An Oregon state Senate committee approved legislation Thursday that could “resolve years of dispute over state taxes on telecommunications companies,” The Oregonian reports. The measure has drawn objection from cities, according to the newspaper.

Lawmakers hope the bill would open the door for Google Fiber to bring its hyperfast Internet service to the Portland area and prompt Amazon and Apple to resume expansion of data centers they operate in central and eastern Oregon.

By capping some taxes and exempting data centers from others, though, the new law would also limit future revenues to local governments that are reliant on property taxes. That has therefore sparked skepticism, particularly of the tax cuts for existing telecom providers.

February 26, 2015

The big news Thursday was the Federal Communications Commission’s vote of net neutrality rules, so you might have missed another significant action the commission took Thursday. It pre-empted portions of state law in North Carolina and Tennessee that petitioners have argued restrict their ability to expand municipal broadband offerings.

That action responds to petitions submitted this past summer by Chattanooga, Tennessee’s Electric Power Board, which runs its network, and the government of Wilson, N.C., to preempt state laws they say prevent them from geographically expanding their broadband offerings.

“Today’s order is more powerful and more expansive than any previously considered or… suggested.”

“The Internet is the most powerful and pervasive platform on the planet. It’s simply too important to be left without rules and without a referee on the field.”

“This proposal has been described by one opponent as, quote, a secret plan to regulate the Internet. Nonsense. This is no more a plan to regulate the Internet than the First Amendment is a plan to regulate free speech.”

“It is important for consumers as well as companies that nothing in today’s order alters the economic model for continued network expansion. An ISP’s revenue stream will be the same tomorrow as it was yesterday.”

Mignon Clyburn:

“We worked closely with the chairman’s office to strike an appropriate balance, and yes it is true that significant changes were made at my office’s request including the elimination of a sender-side classification, but I firmly believe that these items have strengthened this item.”

“So for those in a panic about rate regulation, there are millions who can testify to… how high the bar is to when it comes to the FCC intervening… when it comes to rates and charges.”

Jessica Rosenworcel:

“The result honors the creative, collaborative and open Internet envisioned by those who were there at the start.”

Ajit Pai:

“We are flip-flopping for one reason and one reason only – President Obama told us to do so.”

“So, the FCC is abandoning a 20-year bipartisan framework for keeping the Internet free and open in favor of great Depression- era legislation designed to regulate Ma Bell. But at least we’re getting something in return, right? Wrong. The Internet is not broken. There is no problem for the government to solve.”

“To start, the commission’s decision to adopt President Obama’s plan marks a monumental shift toward government control of the Internet. It gives the FCC the power to micromanage virtually every aspect of how the Internet works.”

“One facet of that control is rate regulation.

Michael O’Rielly:

“Today, the majority of the commission attempts to usurp the authority of Congress by rewriting [ the] Communications Act to suit its own values and political ends. The item claims to forbear from certain monopoly-era Title II regulations but reserving the right to impose them using other provisions or at some point in the future. The commission abdicates its role as an expert agency by defining and classifying services based on unsupported and unreasonable findings.”

“Net neutrality is now the pretext for deploying Title II as far greater extent than anyone could have imagined just months ago.”

The Federal Communications Commission on Thursday approved net neutrality rules in a 3-2 vote that would reclassify broadband service as a public utility under Title II of the 1934 Communications Act.

The panel vote comes roughly a year after a federal appeals court struck down the bulk of 2010 net neutrality rules and the process for drafting new rules has drawn much public attention. The new set of rules is expected to draw litigation.

The rules would reclassify broadband as a telecommunications service under Title II of the 1934 Communications Act, the same portion of law the agency uses to regulate phone companies and other common carriers, and it would prohibit broadband providers from blocking content, throttling traffic or engaging in paid prioritization. The rules would fully apply to mobile broadband. In addition, the agency would have enforcement authority over interconnection actions.

Chairman Tom Wheeler said Thursday’s action was an “irrefutable reflection of the principal that no one, whether government or corporate, should control free and open access to the Internet.”

“This proposal has been described by one opponent as, quote, a secret plan to regulate the Internet. Nonsense,” he later said. “This is no more a plan to regulate the Internet than the First Amendment is a plan to regulate free speech.”

But if this order manages to survive judicial review, these will be the consequences: higher broadband prices, slower broadband speeds, less broadband deployment, less innovation and fewer options for American consumers. Put simply, President Obama’s plan to regulate the Internet is not the solution to a problem. His plan is the problem. This order imposes intrusive government regulations that won’t work to solve a problem that doesn’t exist using legal authority the FCC doesn’t have.

February 25, 2015

The top Republican on the House Energy and Commerce subcommittee with jurisdiction over tech said Wednesday that he hopes that once “everybody has a chance to digest” the text of net neutrality rules the Federal Communications Commission will vote on Thursday, “maybe we will find that there’s a better approach and path and that would be by legislating.”

The proposed rules to be voted on by the FCC would reclassify broadband as a public utility under Title II of the 1934 Communications Act, a move that’s drawn Republican ire and praise from Democrats. Senate and House GOP committee leaders released draft legislation last month that would bar broadband service providers from blocking content, throttling traffic and entering into deals to give priority to some content, while at the same time writing into law the FCC’s current classification of broadband as an ‘information service.” It hasn’t gotten Democratic support.

On Wednesday, Greg Walden, R-Ore., chairman of the Communications and Technology Subcommittee, told reporters after a net neutrality hearing that “it’s too early to tell when we might move” on legislation, noting that he was waiting to see the agency’s rules.

“And then we have to all take time to absorb what they really did and hear from people about… the implications of the order,” he said.

Responding to a reporter’s question about how optimistic he was about getting Democrats on board, he said he anticipated that once the agency acts, perhaps some Democrats might be “freed up” to be more engaged legislatively, but deflected a reporter’s question on why he thought that would be the case, saying it was a question for Democrats.

“It’s not for lack of trying on our part,” he said. “This effort started back in December with multiple meetings and outreaches, but … has gone nowhere yet.”

“I’m hopeful when everybody has a chance to digest the… actual language of the FCC’s order, that maybe we will find that there’s a better approach and path and that would be by legislating,” he said.

On Thursday, the Federal Communications Commission is expected to move to pre-empt state laws in North Carolina and Tennessee that restrict municipalities from offering Internet service. Earlier this month, FCC Chairman Tom Wheelersaid he recommended approving petitions from the Electric Power Board of Chattanooga, Tenn., a public utility run by the city, and the city of Wilson, N.C.

Wheeler wrote last July, even before the petitions were filed, that, “If the people, acting through their elected local governments, want to pursue competitive community broadband, they shouldn’t be stopped by state laws promoted by cable and telephone companies that don’t want that competition.”

The Wall Street Journal in an editorial contends that Wheeler wants to “usurp state authority to regulate municipal broadband networks.”

The piece argues that municipally run networks can “undercut the private market” and that public financing of these networks “puts taxpayers and in some cases electric-utility ratepayers on the hook if the ventures got belly up.”

From the editorial:

In Nixon v. Missouri Municipal League (2004), the Supreme Court rejected federal pre-emption of a state ban on municipal telecom services.

Mr. Wheeler is trying to end-run this ruling by appealing to the FCC’s mandate to “promote competition” and “remove barriers to infrastructure investment.” But if the Labor Department construed its mandate to “foster, promote, and develop the welfare” of workers as broadly, the feds could nullify state laws that forbid cities from raising their minimum wage or restrict collective bargaining for local government workers.

Mr. Wheeler may figure that liberal ends justify illiberal means, but he is threatening serious damage to the federal system and local self-government.

February 24, 2015

As lawmakers make another effort to pass legislation targeting abusive patent litigation, universities are continuing to let them know they have problems with proposals they think go too far.

On Tuesday, more than 140 universities signed a letter to House and Senate Judiciary Committee leaders saying they’re “deeply concerned” that “much of the patent legislation currently being discussed in Congress, including the Innovation Act, H.R. 9, goes well beyond what is needed to address the bad actions of a small number of patent holders, and would instead make it more difficult and expensive for patent holders to defend their rights in good faith.”

The Association of American Universities and the Association of Public Land-grant Universities organized the letter and, according to a press release, most of the institutions that signed it are members of either or both groups. The two associations opposed House legislation during the previous Congress, saying it was too sweeping and would discourage legitimate patent rights enforcement. The two groups were critical of fee-shifting and joinder provisions in that measure and Tuesday’s letter from the individual institutions continued raising concern about those two issues:

Two such proposals – mandatory fee-shifting, where courts award attorney’s fees to the party that prevails in a suit, and involuntary joinder – are especially troubling to the university community because they would make the legitimate defense of patent rights excessively risky and thus weaken the university technology transfer process, which is an essential part of our country’s innovation and entrepreneurial ecosystem.